Hor Kew Corporation (BBP) H2 2023 earnings summary

Executive summary

• FY2023 revenue reached $104.8m, the highest since FY2013; gross margin improved to 21.6% and PBT rose to $7.6m, nearly matching the prior four years combined.

• Higher delivery volumes from stronger order books drove revenue growth; disciplined tender pricing and cost initiatives supported margin improvement despite inflation.

• Profit after tax was $7.4m, while operating cash flow was $15.3m; total borrowings fell $5.9m during the year.

Financial highlights

• Revenue increased to $104.786m from $76.457m in FY2022; gross profit rose to $22.678m from $15.895m.

• Gross margin improved to 21.6% from 20.8%; PBT increased to $7.581m from $2.814m.

• Net profit was $7.412m versus $1.721m; basic and diluted EPS were 14.24 cents versus 3.31 cents.

• Finance costs rose to $2.794m from $1.759m amid higher interest rates; net impairment losses on trade receivables and contract assets were $4.456m versus $3.604m.

• Total assets were $158.8m versus $169.4m; equity increased to $71.7m from $65.2m, and net cash from operating activities reached $15.310m versus $8.285m.

Outlook and guidance

• Local construction activity is expected to remain robust in 2024, with profitable contract wins supported by brand strength; challenges and uncertainties remain.

• Interest rates were expected to ease in 2024; plans included continued loan repayments and negotiations with banks for better financing rates.

• Strategy remains focused on precast concrete and prefabricated metal components, strengthening order books, maximising capacity, and improving products through technology and R&D.